How to: use flexible working to avoid redundancies

Flexible working encompasses a whole variety of arrangements, not just part-time working. These include: job sharing, home working, term-time-only working, and flexi-time schemes.

In the current economic climate, can businesses use flexible working arrangements either as part of ongoing cost cutting, or as alternatives to redundancy? There are legal issues in relation to both of these scenarios that employers should be aware of.

Consent is called for

It may be beneficial for an employer to have current employees switch to working either entirely at home or to reduced hours on a flexible basis. The best way to achieve this variation is with the consent of staff.

Where consent is given, it is advisable to clarify a number of points: will the new arrangements be on a permanent or temporary basis? If temporary, how long? Will there be a trial period? Will the employee have a right to return to the previous arrangements after a certain period?

Without consent, there are two options available. Which one an employer chooses will often depend on the terms of the employment contracts.

The first option is where the contract allows the employer to vary terms of employment. This will be the case if there are “flexibility” provisions – if the contract provides that the employee will work at whatever location, or whatever hours the company requests. However, even where flexibility exists on paper, only reasonable changes will be enforceable without the express consent of the employee.

For example, a contract that states a full-time employee will work 9am-5pm and such other hours as are necessary, would not permit the employer to reduce the hours unilaterally. On the other hand, a contract that allows the employer to make the employee work at “such location as it may reasonably require” would probably permit the employee to be required to work from home, although there is not yet any case law to support this.

If there is no such flexibility in the contract, the employer’s other option is dismissal and re-engagement on new terms. This option, however, may leave the employer open to unfair dismissal claims.

The issues are different for an employer who, as part of a redundancy process, wants to offer reduced hours or flexible working packages as alternatives to redundancy. During any fair redundancy procedure, the employer must consider whether any suitable alternative employment may be offered to the affected staff.

Suitable alternative employment is:

  • an offer by the same employer

  • made before the end of the employment

  • which takes effect immediately on the ending of the original employment (or not more than four weeks after) and

  • is either on the same terms and conditions as the previous contract or is suitable employment in relation to the specific employee.

Flexible working arrangements are therefore potentially suitable alternatives, but only if they are suitable in relation to the particular staff they are offered to.

The employee is not obliged to accept, but, if they refuse, they will forfeit their entitlement to a statutory redundancy payment. The reasonableness of their refusal will be judged on their personal circumstances. An offer that involves a decrease in pay is unlikely to be suitable. But an offer that involves a change in hours and/or location may be.

If a redundant employee accepts an alternative role on different terms, they may be entitled to a statutory trial period of up to four weeks.

The practical issues

Also consider the practical issues. Will there be ‘core’ hours the employee will be required to work? How will these be monitored and recorded? When and how will the employer communicate with the employee? What equipment will the employee be provided with? Will the employee be able to access the company’s systems from home? How will the employer ensure their information is kept confidential? These points should be addressed and specified in writing to the employee.

The employer should also check they have appropriate policies in place that provide for the proper use of any equipment and allow monitoring, and ensure their insurance policies apply to any of their equipment in the employee’s home and that their liability insurance covers employees working from home.

The employer’s health and safety obligations will extend to staff working from home. Employers should either carry out health and safety assessments of the employee’s workstation at home, or place an obligation on the employee to do so and to remain compliant with the employer’s health and safety policy.

With some forward planning, flexible working arrangements may be an answer to cost-cutting problems.

Blair Adams is a partner and Caroline Stakim a solicitor at Shepherd and Wedderburn


  • Employee consent to variation in working terms and conditions is essential.

  • Any new arrangements should be set out clearly in any agreements.

  • Stipulations in an existing contract will affect the employer’s room for manoeuvre.

  • Employers can dismiss and re-hire employees on new terms but that carries risk.

  • Reduced hours and flexible working packages may be offered in a redundancy process.

  • Employees who accept flexible arrangements may be entitled to a four-week trial period.

  • Consider practicalities of working from home, such as access to IT systems and provision of equipment.

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